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Well, we are used to hearing that the center-left in general has forgotten that we are not in 1998 or so, when the Third Way was triumphant. But one would probably have at least some modest expectations about German social-democrats (SPD) putting up a fight for a saner resolution of the euro crisis because they are the strongest center left party in the EU and could have a shot at governing the EU country with the checkbook. Not so, says Wolfgang Munchau. The only political force in Germany that has an economic narrative that is really different from Merkel’s coalition is the “radical” left. In other words we are leaving times when the center left would not do even as much Keynesianism as the IMF demands: more spending in the surplus zone of the EU.

Here are Munchau’s basic points:

“what is most infuriating is the SPD’s sheer inability to explain in a clear way why the chancellor is wrong. The reason for this inability is that the party has bought into the same panoply of false crisis narratives. It bought into the lie about fiscal profligacy as the cause of the crisis, and the need for austerity to solve it. It bought into the lie that Greece is fundamentally solvent. In particular, it bought into the lie that foreign speculators have brought about the situation. This is how the party ended up supporting the eurozone’s fiscal pact, which remains a solution in search of a problem.

As a quid pro quo for support, the SPD got the financial transaction tax, another big diversion. The lack of such a tax did not cause the crisis, nor will its presence resolve it.

At each point, the SPD endorsed a narrow argument of why it was right to support Ms Merkel at a particular time. In doing so, it ended up supporting her entire strategy. (…) The SPD supported financial deregulation in the late 1990s. The SPD supported fiscal austerity. It supported a constitutional debt brake. If you add it all up, the SPD supports economic policies that have ultimately given rise to the imbalances that have driven the eurozone apart. It is hard to see where the parties differ.

Most people understand that some form of transfer from Germany to the periphery will ultimately be necessary. Yet, for some reason, they also believe that Ms Merkel is the politician who will deliver the least costly solution.

Why? Under normal circumstances, one would have expected Ms Merkel might by now have lost her reputation of being a competent crisis manager. Her contribution to this crisis has been to delay resolution, but her political support is holding up. The CDU has a large and persistent lead in the opinion polls over the SPD. And she enjoys an even larger personal lead over her SPD challenger, Peer Steinbrück.

That conundrum is easily explained. The only real opposition to her policies comes from the post-communist left. With Mr Steinbrück, a former finance minister under Ms Merkel, the SPD has chosen the man least likely to offer a credible alternative. He was, after all, the architect of Germany’s anti-crisis policies until late 2009. Mr Steinbrück and Mr Steinmeier are not campaigning to get rid of Ms Merkel. They are campaigning to serve under Ms Merkel as a junior coalition partner.”